Feds Have Resolved Less Than 1% Of Flawed Obamacare Applications

The Obama administration is struggling to address to inconsistencies with Obamacare applications, having resolved just 10,000 of 2.9 million problems so far, according to an independent federal report.

The Health and Human Services Office of Inspector General issued two reports Tuesday on the federal government’s attempt to address widespread inaccuracies in Obamacare applications, the first independent study of the problem. The federal Obamacare exchange, run through HealthCare.gov, faced 2.9 million inconsistencies as of February 2014.

But because the vast majority of Obamacare customers signed up after February, it’s likely that millions more inconsistencies have accumulated in the meantime. The House Energy and Commerce Committee reported in June that as of May 27, the federal Obamacare exchange alone had recorded at least 4 million inconsistencies. (RELATED: House Confirms Half Of All Obamacare Applications Flawed)

The administration isn’t able to resolve 2.6 million of those inconsistencies because the eligibility verification system, which the Obama administration delayed in July 2013, isn’t fully operational yet. All application problems related to citizenship, national status, lawful presence in the U.S., income and whether an employer provides sufficient coverage cannot be addressed until the eligibility system is fully up and running, according to the report, leaving those applications in limbo until then.

That leaves the Obama administration with the ability to resolve over 330,000 discrepancies in other areas, from Social Security numbers, incarceration and whether the applicant is an American Indian — but during the reporting period the IG examined, the federal government had addressed just 10,000, just 0.3 percent of the total number of discrepancies.

Obamacare administrator the Centers for Medicare and Medicaid Services (CMS) simply told the IG that it was “working toward being able to process all inconsistencies.”

While problems with the federal exchange were rampant, the few state-run exchanges also had their share of eligibility discrepancies as well. Oregon, Massachusetts, Nevada and Vermont — all of which have experienced serious technical failures in their Obamacare websites as well — admitted that they are entirely unable to resolve flawed data in applications.

Even more disturbingly, California’s Obamacare exchange, which brought the largest influx of Obamacare sign-ups of any state, was able to resolve some inconsistencies but doesn’t have the resources to deal with all of them due to technical glitches and a large backlog. As of February, California had just 508,000 applicants for Obamacare coverage (Medicaid not included), which has now grown to over 1.3 million. But over 145,000 applications faced problems with eligibility for Obamacare coverage at all; another 73,000 included inconsistencies with subsidy or cost-sharing eligibility — largely due to incorrect income and citizenship information.

The administration pointed out that some of the inconsistencies could be repeats, because the federal exchange’s technology was so faulty that some applications were likely counted twice — an admission that the total number of people covered is somewhat lower than the 8 million-plus sign-ups the federal government is currently touting.

But the federal government, California and Connecticut never instituted effective procedures for ensuring basic eligibility. The federal government, ironically, was unable to verify Social Security numbers; the California Obamacare exchange was unable to verify citizenship; and Connecticut was unable to tell whether applicants already had minimum health coverage outside of the exchange.

The federal government’s failure to resolve the inconsistencies is leaving many customers in the dark about whether their coverage or subsidy level is valid. It’s not yet clear whether the Obama administration will force customers to pay back the federal government for any overpaid subsidies or cost-sharing next tax season, or whether taxpayers will be on the hook for the verification failures.